Agricultural land not used by farmers could be taxed, reform proposes

Government White Paper to propose reform in private agricultural landholdings

Government has published a White Paper proposing a wide-ranging reform of laws regulating agricultural leases
Government has published a White Paper proposing a wide-ranging reform of laws regulating agricultural leases

Two legal amendments targeting agricultural leases will be tabled in parliament on Tuesday as a stop-gap measure to address issues raised by the Constitutional Court.

The amendments that will be tabled by Agriculture Minister Anton Refalo will give landowners the right to lay down conditions on agricultural leases.

But the government has also published a White Paper for a wide-ranging reform of the law regulating agricultural leases to bring it in line with recent court decisions.

The amendments are a temporary solution until the reform is implemented.

The government is proposing the creation of an authority to safeguard private agricultural land within established rural zones, and operate a ‘cadaster’ register for administration of such land.

The same authority will have a board composed of several experts in different sectors, representatives of competent authorities and other interested stakeholders.

The reform will create green zones which can be excluded entirely from potential speculative development.

The White Paper also proposes tax measures to incentivise agricultural land acquisition, by exempting farmers leasing agricultural land from inheritance tax; fiscal incentives for landowners who lease their rural lands to farmers; and taxing agricultural land that is not used for agricultural purposes.

This reform requests a clear distinction when defining a farmer’s status, be it active farmers, hobbyists or newcomers. This will be done in hope of managing land owned by genuine farmers.

The rental price of fields will also not be increasing by more than 1.5% of the land valuation. Regarding the price of land itself, the reform proposes that agricultural land will start to be valued as agricultural land and not at the market price, like other commercial lands in the area.

Residential farms will be considered pre-1995 leases, so the rent subsidy will apply to them according to the latest amendment to the protected leases law.

Lastly, the reform will ensure financial incentives to encourage activity and investments in agriculture.

“No country can survive without agriculture,” Refalo said when presenting the legal amendments and White Paper in Buskett on Tuesday.

Refalo explained how the White Paper aims to find a balance between the right of the owner to his land and the farmer to continue providing produce to the nation and their family.

Currently, in Malta, there is already a law regarding agriculture lease, which puts the interests of the farmer at the forefront but for the past two years, landowners have been challenging this in the Constitutional Court, with one successful case in 2021.

Since then, the court has seen 60 separate cases against farmers who, if decided against, are evicted from the agricultural land they are working on.